A new lawsuit against Metro Nashville government seeks to block the cancellation of a short-term rental permit that Codes Department officials said was issued by mistake last year.

Barbara Culligan argues that the revocation of her permit "will cause irreparable harm, damage to goodwill, and harm for which money damage cannot fully and adequately compensate," according to the legal complaint filed on Monday in the Chancery Court of Davidson County.

She is an Airbnb "Superhost," meaning her Music Row-adjacent home rental is highly rated by guests, and she already has reservations in place through next year.

But her vacation-rental permit is one of more than 100 that were accidentally approved after Feb. 6, 2018, when the most recent law governing short-term rentals went into effect.

Metro Codes officials acknowledged the error to The Tennessean this week. They are in the process of identifying all the permits that will be cancelled, and notices will be sent out in the coming weeks.

Culligan says her constitutional rights are threatened by the revocation.

Law restricts STRs in residential areas

The rule at issue prevents residential property owners in two-family units, such as duplexes and so-called tall-and-skinnies, from getting the permits unless they live in one of the units and own both properties.

It's designed to restrict the rentals in residential areas, where vacationers can be the most disruptive.

But Codes officials mistakenly handed out permits to people who don't meet that criteria last year. They were mistakenly relying on an older law, officials said. Such permits issued before Feb. 6, 2018, are still in effect and will not be cancelled.

"Staff’s initial interpretation focused on the provision that limited permits to one per lot, consistent with previous versions of the law," Metro Codes spokesman Sean Braisted said. "We are still reviewing those permits that are possibly affected, but we anticipate more than 100 permits will be cancelled."

Culligan, whose permit was approved last February, only owns one unit on the two-family lot where she lives near Music Row — making her ineligible to rent it out.

But, since getting a permit, she has rented it 30 times, become an Airbnb "Superhost," and lined up reservations into next year.

Her attorney, Jamie Hollin, is seeking a temporary injunction on her behalf to prevent the permit's cancellation.

"I think that their revocation is illegal and unwarranted," Hollin said. "Imagine being one of these people in this limbo situation."

Constitutional rights invoked

The legal complaint argues that the revocation would violate Culligan's rights under both the U.S. Constitution and the Tennessee Constitution.

It cites the U.S. Constitution's 14th Amendment protection from "laws that are so vague that no ordinary person exercising ordinary common sense could sufficiently understand and comply."

"Revoking or failing to renew Culligan’s short-term rental permit will deprive Culligan her use of her property without due process of law," the suit states. "The Tennessee
General Assembly passed the Short-Term Rental Unit Act to protect users from arbitrary
and capricious changes in the law."